EARLY WARNING REPORT FILED PURSUANT TO

On March 16, 2009, Cliffs Greene B.V. ("Cliffs Greene") acquired, by way of private placement (the "Private Placement"), the following securities issued from treasury by KWG Resources Inc. ("KWG"): (i) 50,448,987 units of KWG (each, a "Unit"), each Unit comprising one common share of KWG (each a "Common Share") and approximately 0.44 of a Common Share purchase warrant of KWG (each whole warrant, a "Warrant"), such that on an aggregate basis Cliffs Greene acquired 50,448,987 Common Shares of KWG, and 22,224,784 Warrants of KWG and (ii) a non-interest bearing convertible debenture of KWG in the principal amount of US$1,033,398 maturing on April 16, 2009 (the "Debenture") (the securities referred to in (i) and (ii) collectively, the "Purchased Securities"). One Warrant becomes exercisable for every five Common Shares issued pursuant to outstanding warrants, options or other rights to purchase Common Shares (the "Outstanding Warrants") as at January 20, 2009, and entitles Cliffs Greene to acquire one Common Share at a price of US$0.05, such price to remain in effect until March 16, 2010 and thereafter at a price of US$0.10 (subject to the undertaking of KWG to reduce such price to US$0.05 upon regulatory approval), with all Warrants expiring by March 16, 2014 at the latest. Subject to obtaining approval of the shareholders of KWG, the Debenture will automatically convert into Units resulting in a further issuance to Cliffs Greene of 21,135,069 Common Shares and 9,310,839 Warrants, and in the event that such conditions have not been met before April 16, 2009, the Debenture is required to be repaid.

The 50,448,987 Common Shares acquired by Cliffs Greene represent 14.9% of the total outstanding KWG Common Shares. Upon the conversion of the Debenture, the additional 21,135,069 Common Shares into which the Debenture is convertible, together with the 50,448,987 Common Shares already held, will increase Cliffs Greene’s aggregate percentage holding of Common Shares to 19.9% for a total of 71,584,056 Common Shares. The acquisition of Common Shares pursuant to the exercise of the Warrants (whether the Warrants comprised in the Units or the Warrants underlying the Debenture) will not increase Cliffs Greene’s percentage holding of Common Shares in KWG beyond 19.9%, such Warrants having been issued for anti-dilutive purposes.

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Cliffs Greene acquired the Units at a price of US$0.048893 (C$0.063096) per Unit and acquired the Debenture for the principal amount of US$1,033,398 (C$1,333600) (the Debenture being convertible into Units at the rate of US$0.048893 (C$0.063096) per Unit).

Purpose of the offeror and any joint actors in effecting the transaction or occurrence that gave rise to the news release, including any future intention to acquire ownership of, or control over, additional securities of the reporting issuer:

The Purchased Securities acquired by Cliffs Greene, referred to in Item 2 above, were purchased from KWG from treasury by way of Private Placement pursuant to a subscription agreement (the "Subscription Agreement") between Cliffs Greene and KWG dated March 16, 2009, and result from the exercise by Cliffs Greene as assignee of an option to purchase securities (the "Option Agreement") entered into between Cliffs Natural Resources Inc. (the assignor and indirect parent company of Cliffs Greene) and KWG dated January 20, 2009. The entering into of the Option Agreement was announced by KWG on January 21, 2009. Concurrent to the entering into of the Subscription Agreement, Cliffs Greene and KWG entered into a shareholder agreement conferring rights of first refusal and pre-emptive rights in favour of Cliffs Greene in connection with the issuance of voting shares or convertible securities of KWG (subject to certain excluded issuances as provided therein) and the right to designate a representative to the board of directors of KWG.

1. 9.

Not applicable.

2. 10.

See response to Item 8 above. Cliffs Greene paid an aggregate of US$3,500,000

In the case of a transaction or occurrence that did not take place on a stock exchange or other market that represents a published market for the securities, including an issuance from treasury, the nature and value, in Canadian dollars, of the consideration paid by the offeror:

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(C$4,516,750) to acquire the Purchased Securities.

If applicable, a description of the exemption from securities legislation being relied on by the offeror and the facts supporting that reliance.

If applicable, a description of any change in any material fact set out in a previous report by the entity under the early warning requirements or Part 4 of NI 62-103 in respect of the reporting issuer’s securities:

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Name of any joint actors in connection with the disclosure required by this report:

Designation and number or principal amount of securities and the offeror’s securityholding percentage in the class of securities immediately after the transaction or occurrence giving rise to the obligation to file the news release:

Designation and number or principal amount of securities and the percentage of outstanding securities of the class of securities referred to in question 3 over which:

(i) the offeror, either alone or together with any joint actors, has ownership and control;

The name of the market in which the transaction or occurrence that gave rise to the news release took place:

The value, in Canadian dollars, of any consideration offered per security if the offeror acquired ownership of a security in the transaction or occurrence giving rise to the obligation to file a news release.